Bizball

The Priciest Trade Ever Made

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On Saturday, the baseball world saw what it often likes to see in a true blockbuster trade. There may be regrets when all is said and done, but for now, the sides each got what they were looking for. The Red Sox, who had the league’s third-highest Opening Day payroll ($175,249,119), got little aside from salary relief in the deal ; the owners of the Dodgers, who on May 1 closed a $2.15 billion sale, were looking to not only make the playoffs but run clean through to a World Series championship.

How big is the deal in the annals of Red Sox, Dodgers, and MLB history? Well, let’s put it this way: it redefines the word “blockbuster.” In terms of money, it is the largest sum of contract dollars moved in a trade. Ever. The Red Sox are moving a total of $262.5 million off the books—a staggering sum. Additionally, no trade has ever involved two players who each had more than $100 million remaining on their contracts (Gonzalez and Crawford). The only other trade in which a player was traded with at least $100 million left on his contract was when Alex Rodriguez was traded from the Rangers to the Yankees in February of 2004.

In terms of the number of players involved, it’s the most in Dodger history, and it ties as the second-most in Red Sox history. Here is a list of deals for Boston that included nine-plus players prior to Saturday’s blockbuster:

It’s not the number of players, however, that everyone is talking about; it’s the mind-numbing, head-spinning amount of money. As I outlined when the Dodgers sale took place, the club is about to land on a mountain of television revenue. At the time, I projected between $4 and $5 billion over 20 years. To put that in comparison, the Angels and Rangers deals that were recently brokered are each worth $3 billion over 20 years, and look what that brought to those teams (see Albert Pujols, Yu Darvish, et al).

This trade was not some spur of the moment thing. Apparently, the Dodgers had been wooing the Red Sox for some time. It wasn’t until the Dodgers said they’d take Carl Crawford on that it got serious.

And while that $262.5 million in total contract dollars is what everyone is talking about from a Red Sox perspective, it’s next season that counts if you’re a Dodger fan.

In that, I mean that the Red Sox now have breathing room. They have flexibility and some prospects to work with. And there’s nothing to say that Boston is done moving money off the books. The chances of David Ortiz being re-signed (remember, he was offered and accepted salary arbitration last year) seem nil, and Jacoby Ellsbury is in his last year of arbitration eligibility this winter. Those two represented $22.625 million in contract dollars this season. At this stage, really, is there anyone in Boston that could be protected in trade talks?

As to the Dodgers, the real issue is next season. For 2012, the club had a player payroll of $105,419,833, well under the Luxury Tax threshold. For 2013, player payroll will explode for the Dodgers. If the club were to exercise all of their club options for Juan Rivera, Todd Coffey, and Matt Treanor, adding them to the $58.25 million in salary they just took on in Gonzalez ($21 million), Crawford ($20 million), Beckett ($15.75 million), and Punto ($1.5 million), payroll next season would be $183.45 million. Throw in dead money from Manny Ramirez ($8.333 million) and Andruw Jones ($3.2 million), and you get a whopping $194,983,333. Oh, and that won’t count any money doled out to players in salary arbitration or contracts for club-controlled players with one-to-three years of major league service time. Even without those players, the Dodgers would still find themselves $16,983,333 over the $178 million luxury tax threshold for next season. And just think: none of this addresses whether the club tries to re-sign some of the other players acquired this season. Joe Blanton, Shane Victorino, Brandon League, and Randy Choate are all free agents this winter.

Something has to give, right? They can’t possibly be willing to saddle this much coin, correct? Not based on the pulse of the club on Saturday. The numbers don’t seem to be affecting ownership of the Dodgers one tiny bit. In a case of not only having deep pockets but also looking to erase the blight that was the Frank McCourt ownership tenure, apparently the club has planted money trees in Chavez Ravine and are cultivating the harvest. Reached for comment Saturday night, shortly after the trade was completed, Dodgers President Stan Kasten said, “We’re not focused on [the luxury tax]. Just thinking about having the best team we can.” Controlling partner Mark Walter, who heads the new ownership of the Dodgers, echoed much the same. When asked if there was a ceiling on spending Saturday, he replied, "Somewhere, I suppose." It’s enough to make George Steinbrenner sit bolt upright in his grave.

The winning, the team’s new ownership, and certainly the bevy of high-profile trades have started to bring the Dodger faithful back. As of Saturday, average attendance was up 4,572 per game, to 41,469, from this point last season. The club finished under three million in paid attendance last season for the first time since 1995, an astonishing feat considering Dodger Stadium’s cavernous seating capacity of 56,000. While that brings some money back, it’s that soon-to-be-acquired television money, however, that has created the spending spree.

The easy thing to note is the possible uptick that the Dodgers will see immediately (after all, Adrian Gonzalez hit a three-run homer Saturday night in his first at-bat in Dodger blue), while the situation in Boston remains cloudy. Bobby Valentine, already a lightning rod of controversy in 2012, becomes an even odder fit if the roster becomes mostly prospects. Starting pitching, the most glaring hole for the Red Sox, doesn’t look to be easily filled through free agency; this winter’s crop of available starters isn’t exactly star-studded, and position players aren’t much better. No, for the time being, the weather will be sunny in California and gloomy in Boston. Red Sox Nation will look to the future, but for the Dodgers, the future is so bright, you gotta’ wear shades.

Here’s a breakdown of Dodger trades and free agent signings this season and associated contract dollars beginning in 2013. (Note: this does not include Todd Coffey, who was signed as a free agent on 2/3/12 and has a club option of $2.5 million for 2013.)

I realize the high dollar amount that the Red Sox traded away is a fun buzz topic. Kind of like how a box office hit generally breaks "top grossing" records because of how ticket price inflation as opposed to the number of tickets sold. However, I imagine there are other teams that have offloaded higher proportions of their payroll. The Astros, for example, went this year from a $38 million payroll to a $5 million payroll.

Yeah, I don't see either being needed or happening. There is the Kuxury Tax at the top, the minimum salary at the bottom, and clear language now on how revenue-sharing is to be used. You're not going to be seeing trades like this often.

OK - greatest ever by far in contract dollars, but what about perceived talent (that is how good were the players thought to be at the time of the trade)? This one may well be a winner there, too, but it is more difficult to measure. Just to start the discussion, I'll nominate three additional trades to weigh against the Gonzalez, Beckett, & Crawford deal, the Lonborg, Conigliaro, & Harper deal, and the Kell, Trout, and Dropo deal:

Just to make sure we are all clear, Joe Carter is the "above average player", right? Alomar was worth about 60 WARP for his career, McGriff and Fernandez were both worth about 40 WARP for their career and Carter was worth just under 30 WARP for his career.

I don't think this trade makes the Dodgers' futur all that bright. For $260 million, they got Adrian Gonzalez' decline phase, a broken down outfielder, a #3 starter, and a non-entity. Bright futures aren't made with such stuff.

"As to the Dodgers, the real issue is next season. For 2012, the club had a player payroll of $105,419,833, well under the Luxury Tax threshold. For 2013, player payroll will explode for the Dodgers. If the club were to exercise all of their club options for Juan Rivera, Todd Coffey, and Matt Treanor, adding them to the $58.25 million in salary they just took on in Gonzalez ($21 million), Crawford ($20 million), Beckett ($15.75 million), and Punto ($1.5 million), payroll next season would be $241.7 million..."

So it's $105.5mil now, and you're adding $58.25mil, and how again are you getting to $241.7mil? You're saying that the options for Rivera, Coffey and Treanor add up to $78 million?

You have to include the big raises that both Matt Kemp ($20.25) and Andre Ethier ($13.5) are getting next season, as well as the contracts of Yasel Puig ($3.71) and Hanley Ramirez ($15.5) that were taken on.

If you add those numbers to the three club options, then you get the $78 million you need to make it $241.7 million.

Just looked it up on Cot's, and the options for Coffey, Treanor and Rivera add up to just short of $7.5 million. Yeah, there's either a writing mistake or a math mistake here, unless there's some big thing I'm missing.

You are forgetting some things: the monies owed to Manny and Andruw Jones, and that many people on the current roster cost more next year: Kemp, Kershaw, Either, Billingsly, Capuano, Harang, Ellis, and Hairston all take home more money.

So you can't use $105.5M as a starting point.

However, Cot's 2013 commitments spreadsheets says right now, leaving arb-eligibles and free agents aside, the Dodgers' payroll for next year is $192.61M. That includes the Sox's castoffs, so I agree that there's an error somewhere.

I am not forgetting those things, Shaun, because they are mentioned subsequently and then added to that $241 million figure.

"Throw in dead money from Manny Ramirez ($8.333 million) and Andruw Jones ($3.2 million), and you get a staggering $253,233,333. Oh, and that won’t count any money doled out to players in salary arbitration or contracts for club-controlled players with one-to-three years of major league service time. Even without those players, the Dodgers would still find themselves $75,233,333 over the $178 million luxury tax threshold for next season..."

The reader misses it because the author misses it. I don't know where the $241 million figure comes from. My guess is that it includes all of the raises owed to everyone currently under contract, and if that's the case then it's a funny way to have worded that paragraph.

I thought he just hadn't specifically mentioned raises due to Kemp, Kershaw, etc. as Mr. P. mentions, but then I look at the 2013 compensation page from BP Cot's, which appears to reflect the trade (i.e. includes AGon, Beckett, Crawfod), puts the payroll at $183M for 21 players. I can't see how filling out the roster would add $60M+ like Maury figures...?